Risk aversion and willingness to pay for water quality: The case of non-farm rural residents

Larue, B and West, G E and Singbo, A and Tamini, L D (2017) Risk aversion and willingness to pay for water quality: The case of non-farm rural residents. Journal of Environmental Management, 197. pp. 296-304. ISSN 0301-4797

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Abstract

Stated choice experiments are used to investigate the economic valuation of rural residents living in the province of Quebec for water quality improvements. In Quebec, rural residents played an important role in the setting of stricter environmental regulations. Unlike most stated choice experiments about the valuation of improvements in water quality, this study explicitly accounts for risk in the design and analysis of choice experiments. Risk in phosphorus and coliform reductions is introduced through a three-point uniform distribution in the choice sets. The results show greater support for constant absolute risk aversion preferences than for constant relative risk aversion. Rural residents value coliform and phosphorus reductions and the more educated ones are particularly willing to see the government tax farmers and taxpayers to secure such reductions. As the science improves and risk in water quality outcomes decrease and as the political weight of non-farm rural residents increase, it should be easier for governments to replace voluntary cost-share programs by polluter-payer programs.

Item Type:	Article
Divisions:	Research Program : West & Central Africa
CRP:	UNSPECIFIED
Uncontrolled Keywords:	Water quality; Willingness-to-pay; Risk aversion; Rural residents
Subjects:	Others > Water Resources
Depositing User:	Mr Ramesh K
Date Deposited:	29 Jun 2017 10:15
Last Modified:	10 Aug 2017 11:24
URI:	http://oar.icrisat.org/id/eprint/10066
Official URL:	https://doi.org/10.1016/j.jenvman.2017.03.050
Projects:	UNSPECIFIED
Funders:	UNSPECIFIED
Acknowledgement:	Funding for this study was provided by Agriculture and Agrifood Canada's Watershed Evaluation of Beneficial Management Practices (WEBs) program and the FQRSC. The authors are grateful to Jornette Dangbedji for her assistance during questionnaire design and data collection and to hydrology expert Prof. Alain Rousseau.
Links:	Google Scholar

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